Timothy Monroe opened a law office on January 1, 2017. During the first month of operations, the

Question:

Timothy Monroe opened a law office on January 1, 2017. During the first month of operations, the business completed the following transactions:

Jan. 1 Monroe contributed $62,000 cash to the business, Timothy Monroe, Attorney. The business issued common stock to Monroe.

3 Purchased office supplies, $500, and furniture, $2,000, on account.

4 Performed legal services for a client and received $1,600 cash.

7 Purchased a building with a market value of $70,000, and land with a market value of $29,000. The business paid $35,000 cash and signed a note payable to the bank for the remaining amount.

11 Prepared legal documents for a client on account, $300.

15 Paid assistant's semimonthly salary, $1,180.

16 Paid for the office supplies purchased on January 3 on account.

18 Received $2,000 cash for helping a client sell real estate.

19 Defended a client in court and billed the client for $ 1,400.

25 Received a bill for utilities, $550. The bill will be paid next month.

29 Received cash on account, $700.

30 Paid $840 cash for a 12-month insurance policy starting on February 1.

30 Paid assistant's semimonthly salary, $1,180.

31 Paid monthly rent expense, $1,300.

31 Paid cash dividends of $2,900.

Requirements

1. Record each transaction in the journal, using the following account titles: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Furniture; Building; Land; Accounts Payable; Utilities Payable; Notes Payable; Common Stock; Dividends; Service Revenue; Salaries Expense; Rent Expense; and Utilities Expense. Explanations are not required.

2. Open the following four-column accounts including account numbers: Cash, 101; Accounts Receivable, 111; Office Supplies, 121; Prepaid Insurance, 131; Furniture, 141; Building, 151; Land, 161; Accounts Payable, 201; Utilities Payable, 211; Notes Payable, 221; Common Stock, 301; Dividends, 311; Service Revenue, 411; Salaries Expense, 511; Rent Expense, 521; and Utilities Expense, 531.

3. Post the journal entries to four-column accounts in the ledger, using dates, account numbers, journal references, and posting references. Assume the journal entries were recorded on page 1 of the journal.

4. Prepare the trial balance of Timothy Monroe, Attorney, at January 31, 2017.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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Related Book For  answer-question

Horngrens Financial and Managerial Accounting

ISBN: 978-0133866292

5th edition

Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura

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